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Anna007 [38]
3 years ago
6

Assume there is no leakage from the banking system and that all commercial banks are loaned up. Suppose the reserve ratio is 25%

. When the Fed buys $40m of bonds from the public who then deposit the proceeds into the banking system,
A. bank reserves increase by $40 million and money supply could increase by a maximum of $40 million.
B. bank reserves increase by $40 million and the money supply could increase by a maximum of $160 million.
C. bank reserves decrease by $40 million and money supply could decrease by a maximum of $40 million.
D. bank reserves decrease by $40 million and money supply could decrease by a maximum of $160 million.
Business
1 answer:
FromTheMoon [43]3 years ago
3 0

Answer:

B. bank reserves increase by $40 million and the money supply could increase by a maximum of $160 million.

Explanation:

In this case there will multiplier effect in the economy. Central bank will pay $40 million by buying bond and it will be deposited in the bank. Bank would its reserves increase by $40 million and of that 25% will locked as reserve requirement but remaining will be circulated in the economy.

Multiplier = Deposit / Reserve Requirement

                = 40/0.25

               = 160

Therefore, The bank reserve will increase by $40 million and money supply will increase maximum by $ 160 million.

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For higher levels of management, responsibility accounting reports a.contain about the same level of detail as reports for lower
ss7ja [257]

Answer:

d. are more summarized than for lower levels of management

Explanation:

This report is generally explained to be a rundown of a company's budget and also expenditure and it is comprised also of different operations by higher levels of the company's management. In as much as it gives reports and details of the lower part of the company, it is generally explained to be more summarized for higher management levels than for lower levels of management. In its bid to assist and control the company's head or responsibility units, it gives headway to staff care/welfare and also steady overview of benefits to staffs.

5 0
3 years ago
A company sold merchandise with a cost of​ $217 for​ $390 on account. The seller uses the perpetual inventory system. The entry
Elden [556K]

Answer:a debit to Cost of Goods Sold and a credit to Merchandise Inventory for​ $217

( The answer Is not in the options given)

Explanation:

The Perpetual inventory is a method of accounting for inventory  which immediately records when an inventory is sold or purchased using the available point-of-sale software systems of the particular business.

In that regard , the entry to record  cost of merchandise sold

Account titles                                              Debit         Credit

Cost of goods (Merchandise sold)             $217

Merchandise Inventory                                                    $217

7 0
3 years ago
______ is the feeling that your efforts make a difference and affect the organization.
steposvetlana [31]

The answer is accomplishment. It is because an individual is likely to feel accomplished if he or she was able to achieve the goal that he or she is trying to pursue and that these accomplishments that he or she achieved has paid the efforts that he or she pushed to and it has make a difference.

5 0
3 years ago
___ are the criteria the firm uses to screen credit applicants in order to determine which of its customers should be offered cr
77julia77 [94]

Answer:

Credit standards

Explanation:

The credit standard refers to the guidelines that are issued by the organization which analyzed whether the borrower is eligible for the loan or not. It could be checked by his or her credit score that reflects the full picture of borrower credit history i.e borrower is paying the amount of loan within in the given time or not or he is a defaulter that helps in deciding whether to offer credit or not and by how much

6 0
3 years ago
Suppose you are evaluating two mutually exclusive projects, A and B. Project A costs $350 and has cash flows of $250 and $250 in
ki77a [65]

Answer:

The answer is 30%

Explanation:

Solution

Given that:

Project A

Project A costs = $350

Cash flows =$250 and $250 (next 2 years)

Project B

Project B costs =$300

Cash flow = $300 and  $100

Now what is the crossover rate for these projects.

Thus

Year Project A    Project B A-B        B-A

0            -350     -300        -50        50

1             250      300        -50        50

2             250      100         150       -150

IRR         27%      26%         30%      30%

So,

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$-50 = $-50/(1+r)^1 + $150/(1+r)^2

r = 30%

CF = CF1/(1+r)^1 + CF2/(1+r)^2

$50 = $50/(1+r)^1 + $-150/(1+r)^2

r = 30%

Hence, the cross over rate for these project is 30%

Note:

IRR =Internal rate of return

CF =Cash flow

r = rate

5 0
4 years ago
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